The course of the Debate this afternoon has, I think, been instructive and interesting. We were deprived, by some reason which I do not entirely explain to myself, of the prospect of a Division a few moments ago, and I think the House wants to come to a decision pretty quickly now, but I do not think I ought to refrain from making some observations. I must say, whilst acknowledging the moderation and friendliness, if I may say so, of the speech of my right hon. Friend (Sir F. Banbury) who moved this Amendment, that it is one which it is quite impossible for the Government to accept. As already stated by my hon. Friend the Financial Secretary, I am prepared to consider, and indeed I am not only prepared to consider, but I have for some time past been considering, what alleviation I can make in the burden which falls on such small or new businesses as the hon. Member who has just sat down has spoken of; and I will call the attention of the House to this, that as a result of this afternoon's Debate it is on those small businesses that the objections have been concentrated, that there have been several admissions from hon. Members who have spoken against my proposals that they are not concerned for the big businesses, which can afford to pay the tax, but that they are thinking of these little businesses or of men who are just now trying to establish themselves in business after serving their country in the War. Let me say in regard to what has been stated about the great amount of correspondence received by hon. Members on the subject, that speaking from my own experience I have been quite as much struck by the letters I have received from men who said, "You will hit me very hard, but you are right, and I beg you to stick to your guns," as I have been by telegrams sent to order, bearing an extraordinary similarity of expression, indicating to me, as to anyone who has been a short time in this House, a common origin for all. I say it is impossible to accept this Amendment to reduce the tax for this year to 40 per cent. If last year, instead of proposing to reduce it to 40 per cent., I had proposed to reduce it only to 60 per cent., I should have got as much gratitude from the payers of Excess Profits Duty as I got for the reduction to 40 per cent., and had I foreseen the conditions that would prevail in the last 12 months that is the proposal which I should have made on the part of His Majesty's Government.
An hon. Gentleman has spoken as if in what I said the other day I had treated the good trade of this country as a reason for now returning to the 60 per cent. rate. That was not so. It was the abnormal and exceptional conditions of trade, producing wholly abnormal, exceptional and extravagant rates of profit. That is a quite different thing. It is not a necessary correlative or concomitant of good trade, but it is an inevitable concomitant of the scarcity that now prevails in the world, and of the immense excess of demand over supply. I say, therefore, that if I could have foreseen I would not have reduced the duty below 60 per cent. last year. I did not foresee the circumstances. You may blame me; you may say I was blind. But who was clearersighted at the moment when I and the Government had to take the decision? Now I find that the circumstances are wholly different from what were then con templated, that the abnormality of the conditions not merely remains, but has increased in the twelve months which have passed. Prices, instead of falling, have risen further. I am always told that prices will rise if I put on a tax, but nobody has ever pointed out that prices fell when I reduced it. Then my hon. Friend goes into the region of prophecy and says that if I had not reduced it, prices would have been still higher. My own impression is that they were about as high as they could go. I find prices rise, and I find that, with the rise in prices, profits are higher than before, though we all supposed they would become less. Under those circumstances, if we could have foreseen this last year, we would not have reduced the tax so much, and we are entitled to put the duty back— not to the 80 per cent., which I think under any circumstances, except those of extreme necessity is too high—but to the 60 per cent.
I have asked for alternatives, but they are not so easy to find, and when you do find them they are not so free from objection that they are universally acceptable. I have had suggestions put to me. Curiously enough, they have generally been suggestions which I have already examined with my advisers, and some of which I have put to those representatives of commerce and industry who have waited upon me with their objections to the Excess Profits Duty. I have heard a good deal to-day in the discussion about the inequality of a flat rate of Excess Profits Duty. I have suggested as an alternatitve to the representatives of commerce and industry that this tax should be graduated like the Super-tax. [HON. MEMBERS: "Hear, hear!"] Does the House like that? [HON. MEMBERS: "Hear, hear!"] Well, representatives of commerce and industry did not. They declined the suggestion. I invited them to find me an alternative. In conversation across the Table the suggestion was immediately thrown out that somebody else should be taxed. I said that that was not the alternative for which I sought. I asked them to raise a similar sum of money from approximately the same people with greater fairness and without the inconvenience of which they complained. They went away to consider, and approached me again in January. I said I should be very glad to see the alternative, and they really had no alternative.